Per IRS web site:
"Generally, an employee may claim exemption from income tax withholding because he or she had no income tax liability last year and expects none this year. The Form W-4 Instructions state that you cannot claim exemption from withholding if (1) your income exceeds a certain dollar threshold and includes more than a certain dollar amount of unearned income (e.g., interest and dividends) and (2) another person can claim you as a dependent on their tax return. Please refer to the current year Form W-4 Instructions for these dollar amounts."
